Capitalism and Islam

Islam is described generally as the founder of capitalism and is credited with establishing the first capitalist economies and free markets in history. Market economies enforced by strong property rights, which were at a level unseen before in history, underpinned economic growth during the Umayyad and Abbasid era.

Islamic Capitalism was active during the Islamic Golden Age and Muslim Agricultural Revolution, where an early market economy and form of merchant capitalism took root between the 8th–12th centuries. A vigorous monetary economy was based on a widely-circulated currency (the dinar) and the integration of monetary areas that were previously independent. Business techniques and forms of business organisation employed during this time included contracts, bills of exchange, long-distance international trade, forms of partnership (mufawadha) such as limited partnerships (mudharaba), and forms of credit, debt, profit, loss, capital (al-mal), capital accumulation (nama al-mal),[1][failed verification] circulating capital, capital expenditure, revenue, cheques, promissory notes,[2] trusts (see Waqf), savings accounts, transactional accounts, pawning, loaning, exchange rates, bankers, money changers, ledgers, deposits, assignments, the double-entry bookkeeping system,[3] and lawsuits.[4] Organizational enterprises independent from the state also existed in the medieval Islamic world, while the agency institution was also introduced.[5][6] Many of these early capitalist concepts were adopted and further advanced in medieval Europe from the 13th century onwards.[1] Some have argued that these economic activities laid the foundations for the development of modern capitalism.[7][8]

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